COCOA
A mixed forecast for West Africa may keep cocoa inside a range until there is a clearer indication for the mid-crop. Recent rains have made growers more optimistic about the late mid-crop, but near term supplies remain very tight. Warm and wet conditions were seen across West Africa over the past week, and warm and dry weather is expected over the next 10 days. Soil moisture is still low. Ivory Coast’s cumulative rainfall since April had reached 199.5 mm as of June 19 versus a “normal” amount of 280.8 mm. Ghana’s marketing board COCOBOD reported this week that as of May 23, the nation’s graded and sealed cocoa purchases since September 1 had reached 412,833 metric tons, down 33.7% from the same period a year ago. Their light crop production this year is expected to reach 25,000-35,000 tons versus 15,000 for the same period last year, but their total for 2023/24 is expected to reached 450,000 tons versus 800,000 originally forecast. Total Ivory Coast arrivals since the marketing year began on October 1 are down 27.9% from a year ago. ICCO reported this morning that world cocoa stocks at reporting depots fell 15% year on year in March.
COFFEE
September coffee traded to is highest level since June 6 overnight, as traders could be getting more concerned about weather in Brazil. Reuters reports that the latest AIFS forecast says the risk of frost persists for early July. Minas Gerais is expected to see below average rainfall for the next 10 days. As of May 1, soil moisture in southeast Brazil measured 317.3 mm in the top 0-1.6 meters of soil versus 359.4 last year and an average of 425.7. Accumulated rainfall since April 20 has reached 20.6 mm versus a “normal” reading of 75.0. Rain has returned to Vietnam, but there are concerns it is too little, too late. ICE exchange stocks reached 829,540 bags yesterday, up 5,124 from Tuesday and the highest since June 2022.
COTTON
December Cotton extended its recent bounce overnight after trading to its lowest level in 3 ½ years on Monday. The market is rallying from deeply oversold levels, and a decline in US conditions for the second week in a row may have given sellers second thoughts. The 6-10 day forecast shows much above normal temperatures across the lower two-thirds of the nation, including West Texas, the Delta, and the Southeast, but rainfall chances are above normal. Temperatures moderate slightly in the 8-14-day forecast. The India Meteorological Department expects their nation’s June rainfall to be below normal, which means it would be less than 92% of the long-period average. This is a disappointment to growers who had been expecting normal rainfall in June and a strong monsoon this year with the departure of El Niño. However, the monsoon is starting to advance after stalling for a week.
SUGAR
The CEO of Copersucar, the world’s largest sugar merchant, told reporters on an earnings call this week that drier than normal weather in Brazil has hurt cane development and will lead to a smaller crop, but he also said that mills will increase the cane allocation to sugar production as the new crop matures. Warm and dry conditions are expected to persist through late this month. The recent Unica report showed that Brazilian Center-South production for the second half of May was down 7.7% from a year ago but total production for the first two months of the 2024/25 season was 11.8% higher. The India Weather Office said on Tuesday that the country will likely receive below-normal rainfall in June. The monsoon usually begins in the south around June 1 and spreads nationwide by July 8, and this could lower expectations for their 2024/25 crop. It is starting to move again after stalling for a week, and this could bring relief to the extreme heat. Thailand is expected to see higher production this year, but the Brazilian outlook is in question, and this has helped lift the market off its May lows.
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